in the case at bar, the pertinent language is reduced to the following:
'Nothing contained in this section shall apply to transactions duly consummated pursuant to authority given by the Secretary of Agriculture under any statutory provision vesting such power in such Secretary.'
In support of this defense, defendant introduced evidence to the effect that it applied to a Government financial institution, known as the Baltimore Bank for Cooperatives, for a loan to enable it to carry out the purchase of the Embassy assets and that after scrutinizing the merits of the proposed transaction the Bank made the loan requested by the defendant. The defendant further introduced evidence to the effect that the Marketing Division of the Farmer Cooperative Service of the Department of Agriculture looked into the desirability of the transaction and expressed a favorable opinion.
This evidence does not sustain the defense, for two reasons. First, the statute above quoted exempts only such transactions as are consummated pursuant to authority given by the Secretary of Agriculture 'under any statutory provision vesting such power in such * * * Secretary'. Admittedly, however, there is no statutory provision empowering the Secretary of Agriculture to approve any transaction such as is involved here. Second, the transaction was not authorized either by the Secretary of Agriculture or by anyone acting in his behalf. The acts and statements of Government officials on which the defendant relies are not sufficient to constitute statutory sanction. Even if they should be deemed to be such representations as might form a basis for an estoppel as between private individuals, this circumstance cannot aid the defendant. It is elementary law that the Government cannot be estopped by statements or acts of any of its officers or agents. Authorities supporting this principle and applying it are legion. Suffice it to cite two old decisions of the Supreme Court from which the later authorities are derived and on which they are based, In re Floyd Acceptances, 7 Wall. 666, 676, 19 L. Ed. 169; and Wisconsin Central Railroad Co. v. United States, 164 U.S. 190, 210, 17 S. Ct. 45, 41 L. Ed. 399.
The Court, therefore, concludes that the acquisition of the assets of Embassy Dairy, Incorporated, by the defendant, constituted a violation of Section 7 of the Clayton Act and that, consequently, judgment should be rendered compelling the defendant to divest itself of these assets and cancelling all contracts ancillary to the transaction.
A different problem arises in connection with the acquisition of the capital stock of the Richfield-Wakefield Dairies. There are two concerns involved, one known as Richfield, the other one Wakefield. At the time in question, the Richfield Corporation was out of business, but owned and controlled the stock of Wakefield Corporation, or rather Simpson Brothers, Incorporated, which operated the Wakefield Dairy. The evidence establishes without contradiction that at the time when the capital stock of these two corporations was purchased by the defendant the two companies were hopelessly insolvent and were deeply in debt. The defendant was a very large creditor, for an amount exceeding $ 300,000, for unpaid milk bills. The Wakefield Dairy was in fact on the brink of bankruptcy.
The acquisition of capital stock or assets of a failing corporation is not within the ban of Section 7 of the Clayton Act. While the statute does not expressly so provide, this conclusion is inherent in the statutory provision because the acquisition of a failing corporation that is on the verge of going out of business cannot result in lessening competition or in creating a monopoly. Be that as it may, the Supreme Court so held in International Shoe Co. v. Federal Trade Commission, 280 U.S. 291, 298, 50 S. Ct. 89, 74 L. Ed. 431.
The Court concludes, therefore, that the acquisition of the capital stock of the Richfield Dairy Company and Simpson Brothers, Incorporated, was not violative of Section 7 of the Clayton Act.
This opinion will constitute the findings of fact and conclusions of law.
Judgment will be rendered adjudging the acquisition by the defendant of the capital stock of Richfield Dairy Company and Simpson Brothers, Incorporated, to be valid; and further adjudging the acquisition by the defendant of the assets of Embassy Dairy, Incorporated, and the contracts ancillary thereto, to be invalid as in violation of Section 7 of the Clayton Act. The judgment will require the defendant to divest itself within a reasonable time of all assets acquired from Embassy Dairy, Incorporated, and will direct the cancellation of all contracts ancillary to the acquisition. The judgment will further direct the defendant to file a report within sixty days and at such other times as the Court may order, setting forth what steps are being taken to carry out this judgment. The judgment will also provide that applications may be made at the foot of the decree.
Counsel will submit a proposed judgment.
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